Xinjiang Tianshan Cement Co.Ltd(000877)
Internal control evaluation report in 2021
Xinjiang Tianshan Cement Co.Ltd(000877) all shareholders:
In accordance with the rules for the preparation and reporting of information disclosure of companies offering securities to the public No. 21 - General Provisions on annual internal control evaluation report, the basic norms of enterprise internal control and its supporting guidelines and other internal control regulatory requirements (hereinafter referred to as the "enterprise internal control standard system") issued by the CSRC and the Ministry of finance, in combination with the company's internal control system and evaluation methods, Based on the daily and special supervision of internal control, we evaluated the effectiveness of the company's internal control in 2021.
1、 Important statement
It is the responsibility of the board of directors of the company to establish, improve and effectively implement internal control, evaluate its effectiveness and truthfully disclose the internal control evaluation report in accordance with the provisions of the enterprise's internal control standard system. The board of supervisors shall supervise the establishment and implementation of internal control by the board of directors. The management is responsible for organizing and leading the daily operation of the enterprise's internal control. The board of directors, the board of supervisors and the directors, supervisors and senior managers of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this report, and bear individual and joint legal liabilities for the authenticity, accuracy and completeness of the contents of the report.
The objective of the company's internal control is to reasonably ensure the legal compliance of operation and management, asset safety, authenticity and integrity of financial reports and relevant information, and improve operation efficiency and effect. Due to the inherent limitations of internal control, it can only provide reasonable assurance for the realization of the above objectives. In addition, as changes in circumstances may lead to inappropriate internal control or reduced compliance with control policies and procedures, there is a certain risk to speculate the effectiveness of internal control in the future according to the internal control evaluation results.
2、 Internal control evaluation conclusion
According to the identification standard of major defects in the company's internal control, there are no major defects in the internal control of financial reporting on the benchmark date of the internal control evaluation report. The board of Directors believes that the company has maintained effective internal control over financial reporting in all major aspects in accordance with the requirements of the enterprise's internal control standard system and relevant regulations.
According to the identification standard of major defects in the company's internal control over non-financial reports, the company found no major defects in the internal control over non-financial reports on the benchmark date of the internal control evaluation report.
From the base date of the internal control evaluation report to the issuance date of the internal control evaluation report, there are no factors affecting the evaluation conclusion of the effectiveness of internal control.
3、 Internal control evaluation
The company has established a leading group for the construction of internal control system and a working group for the construction of internal control system. The chairman of the company serves as the leader of the leading group for the construction of internal control system and is fully responsible for the internal control of the company. The company hired Tianzhi international accounting firm (special general partnership) to conduct independent audit on the company's internal control. The Audit Department of the company organized and implemented the self-evaluation of internal control in 2021 in strict accordance with the notice requirements of the SASAC on strengthening the construction and supervision of the internal control system of central enterprises. Following the principle of "unified requirements, graded responsibilities and carried out level by level", conduct a comprehensive self-assessment on the effectiveness of the internal control system around key businesses, key links and important posts, objectively, truly and accurately reflect the internal control defects, risks and compliance problems existing in the operation of the enterprise, and actively implement the rectification of the problems found in the evaluation.
(I) scope of internal control evaluation
The scope of internal control evaluation covers the parent company and all subsidiaries within the scope of the company's consolidated financial statements in 2021, as well as the main business and process control matters.
The main business covers organizational structure, development strategy, human resources, social responsibility, corporate culture, capital activities, procurement business, asset management, sales business, project management, investment management, fund-raising management, guarantee business, related party transactions, financial reporting, comprehensive budget, contract management, etc. the parent and subsidiary companies included in the evaluation account for 100.00% of the company's total assets and 100.00% of the company's operating revenue.
The high-risk areas of focus mainly include policy risk, capital risk, market risk, quality risk, safety and environmental protection risk and human resources risk.
The above units, businesses and matters included in the evaluation scope and high-risk areas cover the main aspects of the company's operation and management, and there are no major omissions.
（2） Internal control evaluation procedures and methods
The internal control evaluation shall be carried out in strict accordance with the procedures specified in the basic norms, evaluation guidelines and the company's internal control evaluation measures. The internal control evaluation is mainly divided into internal control evaluation training, preliminary preparation stage, self-evaluation stage of each unit, summary of evaluation results and issuance of reports by the undertaking department, defect rectification stage and archiving stage of working papers.
In the process of self-evaluation, the methods of walk through test, field inspection, sampling and comparative analysis are adopted to widely collect the evidence of the effectiveness of the company's internal control design and operation, truthfully fill in the evaluation working paper, and analyze and identify the defects of internal control.
(III) internal control evaluation basis and internal control defect identification standard
In accordance with the basic norms of enterprise internal control, the guidelines for the application of enterprise internal control, the guidelines for the evaluation of enterprise internal control, the guidelines for the internal control of listed companies of Shenzhen Stock Exchange and the company's internal control system, and in accordance with the identification requirements of the enterprise internal control normative system for major defects, important defects and general defects, combined with the factors such as the company's scale, industry characteristics, risk preference and risk tolerance, Distinguish between internal control defects in financial reports and internal control defects in non-financial reports, study and determine the specific identification standards of internal control defects applicable to the company, which are consistent with those in previous years.
The identification standards of internal control defects determined by the company are as follows:
1. Identification standard of internal control defects in financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows: Based on the data of the consolidated financial statements of the previous year, the quantitative criteria for determining the importance of misstatement (including omission) in the consolidated financial statements of the company are as follows:
If the loss that may be caused or caused by the defect of internal control is related to the income statement, it shall be measured by the operating revenue index. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 2% of the operating revenue, it is recognized as a general defect; If it exceeds 2% but less than 5% of the operating revenue, it is an important defect; If it exceeds 5% of the operating revenue, it is recognized as a major defect.
A measure of the total amount of assets that may result from deficiencies in internal control. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 0.5% of the total assets, it is recognized as a general defect; If it exceeds 0.5% but less than 1% of the total assets, it is recognized as an important defect; If it exceeds 1% of the total assets, it is recognized as a major defect.
(2) Qualitative criteria for the evaluation of internal control defects in financial reporting
Major defects:
① Major fraud of directors, supervisors and senior managers of the company;
② The company corrects the published financial report, and the amount affected reaches the quantitative standard of major defects;
③ Material misstatement in the current financial report found by the certified public accountant but not identified by the company's internal control. Material misstatement refers to the amount of misstatement that reaches the quantitative standard of material defects;
④ The supervision of the company's audit committee and internal audit institutions on internal control is invalid.
Important defects:
① Failure to establish anti fraud procedures and control measures;
② The company corrects the published financial report, and the amount affected reaches the quantitative standard of important defects.
③ Failure to select and apply accounting policies in accordance with generally accepted accounting standards, resulting in the issuance of qualified annual audit reports by audit institutions;
④ The company's audit committee and internal audit institutions have important defects in the supervision of internal control;
General defects: control defects other than the above major defects and important defects.
2. Identification standard of internal control defects in non-financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows: if the losses that may be caused or caused by internal control defects are related to the profit statement, they shall be measured by the operating revenue index. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 2% of the operating revenue, it is recognized as a general defect; If it exceeds 2% but less than 5% of the operating revenue, it is recognized as an important defect; If it exceeds 5% of the operating revenue, it is recognized as a major defect.
A measure of the total amount of assets that may result from deficiencies in internal control. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 0.5% of the total assets, it is recognized as a general defect; If it exceeds 0.5% but less than 1% of the total assets, it is recognized as an important defect; If it exceeds 1% of the total assets, it is recognized as a major defect.
(2) Qualitative criteria for the evaluation of internal control defects in non-financial reports
Major defect: if the possibility of defect occurrence is high, it will seriously reduce the work efficiency or effect, or seriously increase the uncertainty of the effect, or make it seriously deviate from the expected goal.
Important defect: if the possibility of defect occurrence is high, it will significantly reduce the work efficiency or effect, or significantly increase the uncertainty of the effect, or significantly deviate from the expected goal.
General defects: if the possibility of defects is small, it will reduce the work efficiency or effect, increase the uncertainty of the effect, or make it deviate from the expected goal.
(IV) identification and rectification of internal control defects
1. Identification and rectification of internal control defects in financial reporting
According to the above identification standards of internal control defects in financial reports, the company has no major defects in internal control over financial reports during the reporting period.
2. Identification and rectification of internal control defects in non-financial reports
According to the above identification standards for internal control defects of non-financial reports, no major defects and important defects of the company's internal control of non-financial reports were found during the reporting period, and there were some situations, such as incomplete contents of individual management systems, delayed acceptance and transfer of projects to fixed assets, untimely reconciliation, etc. The company has formulated the system revision plan in accordance with the requirements of the internal control standard system, timely revised and improved the system, and standardized the relevant activities of system management. At the same time, strengthen the supervision and inspection of the implementation of the system through daily supervision and inspection, audit, internal control evaluation and other work to ensure that all management systems are strictly and effectively implemented. The company will continue to pay attention to the establishment and improvement of the system, promote the continuous revision and improvement of various business management systems, continuously improve the level of management institutionalization, effectively promote the enterprise to continuously improve the internal control system and improve the ability to prevent and resolve major risks. (V) description of other major matters related to internal control
During the reporting period, the company has no other internal control information that may have a significant impact on investors' understanding of internal control evaluation report, evaluation of internal control or investment decision-making.
Conclusion:
During the reporting period, the company's internal control system was sound and effectively implemented. In 2022, the company will closely focus on the annual work objectives, deeply promote the internal control management, ensure that the internal control is compatible with the company's development strategy, business scale, business scope and risk level, and adjust in time with the continuous changes and needs of the company's operation and management. The company will further improve the internal control system, standardize the effective implementation of the internal control system, strengthen the supervision and inspection of internal control, continuously improve the risk management level of the company and promote the healthy and sustainable development of the company.
Xinjiang Tianshan Cement Co.Ltd(000877) March 21, 2022
